ABSTRACT Neuroimaging studies of depression have suggested that reduced brain reactivity to gain is significantly linked to diminished hedonic tone (i.e., anhedonia) and future Major Depressive Disorder (MDD). This work has also suggested that increased brain reactivity to loss may be a key biomarker of increased negative emotionality in MDD and risk for depression as well. Despite compelling findings suggesting that diminished hedonic tone and increased negative emotionality are significant risk factors for MDD in preschoolers, there have been very few investigations examining the developmental timing of altered neural reactivity to gain and loss and increased early emotional risk for depression at this age. The purpose of proposed study is to begin filling this knowledge gap. To facilitate this goal, complimentary functional magnetic resonance imaging (fMRI) and event related potential (ERP) measures of response to gain and loss will be collected in 200 4-7 year olds at two time points 1-year apart. Measures of reward learning, suggested to be a key mechanism linking reduced hedonic tone to later MDD, will also be collected and examined for potential relationships with brain reactivity to reward. An expert interdisciplinary team of investigators and consultants will support the proposed research plan. The feasibility of the proposed project is enhanced by the study team's well established history of recruiting and following large samples of preschoolers and in obtaining high quality fMRI and ERP data in children this young using developmentally sensitive methods to acclimate and train them for the demands of these environments. A systematic approach investigating brain reactivity to gain and loss will be conducted at the level of individual brain regions previously shown to be critical for reward processing and disrupted in depression. It is hypothesized that diminished brain reactivity to gain at baseline will be associated with diminished hedonic tone and reward learning measured at baseline and 1 year later. Similarly, it is hypothesized that increased brain reactivity to loss at baseline will be associated with increased negative emotionality at baseline and 1 year later. It is also hypothesized that 1) increasing brain reactivity to gain between baseline and follow-up assessments will predict increased hedonic tone and reward learning 1 year later and that 2) decreases in brain reactivity to loss during this time will predict decreased negative emotionality 1 year later. Importantly, the current study will investigate whether fMRI and ERP measures of brain reactivity to gain and loss act similarly in the hypothesized relationships. By studying how brain reactivity to gain and loss in preschoolers is associated with early alterations in emotion processing that increase risk for depression at this age, the current study may reveal unique and early occurring neurobiological markers and neurodevelopmental trajectories of risk for continued mood difficulties and/or later MDD. By further investigating whether fMRI and ERP function similarly in study predictions, information critical for the future clinical use of these methods to support earlier identification and develop novel treatments minimizing depression's public health burden will also be gained.